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China’s FDI inflows surge at fastest rate in 13 years during first quarter, surpassing pre-pandemic

  • 10,263 new foreign-invested companies were established in China during the first three months of the year

  • Data from the Ministry of Commerce comes as China continues to court foreign businesses while the United States is looking to help American companies exit the Chinese market

Foreign direct investment in China grew at the fastest pace in more than a decade during the first quarter of 2021, according to data released by the Ministry of Commerce on Thursday. The news came amid lingering concerns that pandemic disruptions and rising international tensions could accelerate a supply-chain exodus from the world’s second-largest economy.

Foreign direct investment – excluding financial sectors such as banking, securities and insurance – surged 43.8 per cent during the January-March period, year on year. That was the highest quarterly growth rate since the second quarter of 2008. In yuan terms, FDI in the first quarter grew by 39.9 per cent to 302.47 billion yuan (US$46.28 billion), marking a 24.8 per cent increase from the same period in pre-coronavirus 2019.

A total of 10,263 new foreign-invested companies were established in China during the first three months of the year, 47.8 per cent more than during the first quarter of 2020, and a 6.8 per cent increase from the same period in 2019, ministry data shows.


Investment in China among the 10 members of the Association of Southeast Asian Nations (Asean) also increased by 60 per cent in yuan terms during the first quarter. Asean is now China’s largest trading partner.


Data also shows that FDI into China’s hi-tech industries rose 32.1 per cent in yuan terms during the first three months of the year, with a jump of 43.9 per cent in the hi-tech service sector and a rise of 2.5 per cent in hi-tech manufacturing.

This came after Beijing outlined a comprehensive five-year plan for 2021-25 to upgrade its manufacturing capabilities in eight critical areas, including robotics, aircraft engines, new energy vehicles and smart cars.


Additionally, FDI into the service sector was 237.79 billion yuan in the first quarter, up 51.5 per cent. In yuan terms, the total FDI that flew into eastern, central and western China increased by 38.2 per cent, 36.8 per cent and 91 per cent, respectively.

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